Commerce Department says tariffs could make car repairs, insurance premiums more expensive

The Minnesota Department of Commerce is warning residents that recent and impending federal tariffs could not only raise the cost of buying a car but also increase the cost of repairs and insurance.

The Trump administration says these tariffs will strengthen the U.S. auto industry.

Tariffs on car parts from Canada and Mexico, as well as additional tariffs on parts from China, are set to take effect in April. Nearly 60% of auto replacement parts come from these countries, according to the America Property Casualty Insurance Association.

“U.S. tariffs, whether enacted or threatened, could increase the cost of maintaining and insuring your car,” said Commerce Commissioner Grace Arnold. “This is a manmade crisis that will make it more expensive for everyday Minnesotans to drive.”

The Department of Commerce warns that this could drive up the cost of your insurance because increasing the cost for these parts will likely increase the price for repairs and insurance claim costs.

The America Property Casualty Insurance Association says insurance costs have already been impacted by higher costs for car repairs, the impact of climate change, more frequent and extreme weather events, and legal lawsuits.

The Commerce Department warns that higher repair costs from tariffs will further increase insurance premiums upon renewal.

“Minnesota’s auto insurance market is competitive, allowing consumers to shop for lower premiums. However, insurance markets depend on stability and predictability to offer consumers comprehensive insurance at affordable prices. These tariffs will likely make it more expensive for Minnesotans to get to work, take their kids to childcare, and drive across our state,” Arnold said.

The Minnesota Department of Commerce advises residents to stay informed about these developments, review their policies, and consider how potential increases in vehicle and insurance costs could affect their personal budgets.